Old Mutual is being sued for about R70-million by a pension fund which accuses the insurance giant of neglecting its duty to members.
The court action, which has been set down for October 16 in the Cape High Court, follows years of battles between the members of the AMK CAF Pension Fund and their employers, Laurie and Jan Korsten.
The Korstens bought AM International in 1994, changing the name to AMK Technologies.
Between 1994 and 1996, they transferred money from the pension fund to their own family companies: Corporate Acceptances Finance, AMK Technologies and Wokor Investments.
The companies were later placed in liquidation and the pension fund was placed under curatorship in March 1997.
In the Johannesburg High Court earlier this month, the Korstens were acquitted of criminal charges of theft.
But that is not the end of the story: members of the fund are preparing a petition asking the state to appeal against the court decision.
Eric Cowling, a spokesman for the pension fund members, said this week he was "aghast" at the court decision and hoped the state would appeal.
At the same time, the curator of the pension fund, Tony Mostert, a Johannesburg attorney, is preparing a court action against Old Mutual on behalf of the fund's members.
In court papers, Mostert accuses Old Mutual of negligence and breach of contract.
He says this is probably the first legal action of this kind by a pension fund.
Until the Korstens bought AM International in 1994, the pension fund money was invested in insurance policies which were underwritten by Old Mutual.
A total of R32-million of this money was subsequently paid out by Old Mutual to the Korsten family companies.
Mostert claims in court papers:
* That Old Mutual was guilty of negligence and in breach of its duties by paying out the money to the Korsten companies; and
* That the pension fund money should have remained with Old Mutual, invested in insurance policies, and should not have been paid out.
Old Mutual is being called upon to pay R55-million plus interest, which Mostert says could amount to a total of R70-million.
Pensioners who previously worked for AMK Technologies and the other Korsten companies have been paid out their pensions by the curator throughout the drama.
But active members of the fund stopped paying contributions when the companies were liquidated in 1997. They stand to lose the contributions they had already paid - and their chances of being paid a pension when they retire - unless Old Mutual pays up, Mostert says.
Koos Stassen, Old Mutual's chief legal adviser, is overseas and could not be reached for comment on the matter yesterday.